IRB Infrastructure Developers Ltd. share price target

IRB Infrastructure (IRB)’s revenue grew 27% YoY to INR20.6b in 4QFY24 (in
line). EBITDA margin came in at 43.2% (down 370bp YoY, below our estimate
of 45%). EBITDA grew 17% YoY to INR8.9b, in line with our estimate

Constructing with a profitable growth

Constructing with a profitable growth

Cruising in top gear

IRB Infrastructure (IRB) reported revenue decline of 17% YoY to INR12.8b (11% below estimates) due to weak execution, impacted by a delay in the receipt of the appointed date for the Vadodara HAM (VM7) project. The EPC segment reported revenue/EBITDA decline of 27%/3% YoY. The outstanding EPC order book stood at INR121b, with an OB/revenue ratio of 2.9x. The EBITDA margin improved to 58%, with a higher share of toll revenues in the overall mix. EBITDA grew 3% YoY to INR7.4b (our estimate: INR6.9b). With COVID-related restrictions easing, toll collections are returning to...

Newly awarded projects to start contributing for construction revenues, as appointment date is expected within 2-3 months. IRB's 1QFY22 results were ahead of estimate led by strong growth in construction revenues, as execution pace rises. In 1Q, toll revenues in 11...

Construction revenues expected to remain strong with Rs77bn EPC order book to be executed over next 2 years. IRB's 4QFY21 results were a mixed bag with revenues missing estimates due to lower construction revenues, while margins surprised positively. In 4Q, toll...

IRB's consolidated financials are not comparable YoY due to the monetization of nine assets through the InvIT route and consolidation of the Mumbai-Pune Phase II project. The Construction business reported a revenue/EBITDA/adjusted PAT decline of 22%/22%/53% YoY. Normalcy in traffic led to strong (32% QoQ) growth in collections across 13 toll assets of IRB and IRB InvIT. Though losses from the associates reduced sequentially, higher depreciation from Mumbai-Pune Phase II project led to a 29% miss on our earnings estimate in spite of a beat on our revenue estimate. For...

Company targets Rs60-80bn order inflows in 4QFY21E on the back of strong NHAI bid pipeline. Order book stands at Rs113.1bn (2.9x TTM revenues). IRB reported strong quarterly performance, in line with our estimates primarily driven by sharp uptick in toll revenues. In 3Q, toll revenues came in...

At the end of Q2FY21, IRB's order book (OB) was at ~| 12,150 crore (2.2x TTM revenues), largely contributed by the construction segment (| 5,129 crore) and O&M; job of BOT, ToT projects (| 7,035 crore). However, in contrast with industry focused asset-light EPC business, IRB's emphasis remains on BOT, ToT and HAM projects wherein it is targeting ~| 5,000 crore of order inflows in the rest of FY21. The company has also participated in the bidding process of the ToT-5 bundle. We note that order inflow will...

Given strong bid pipeline for BOT projects, management guided Rs60-70bn order inflows in FY21E. Order book stands at Rs121.6bn (2.9x TTM revenues) IRB reported decent quarterly performance in line with our estimates led by...

Post relaxation in lockdown, company saw sharp revival in toll collection across projects which stood at an average ~80% YoY pre-covid levels in July'20, with some projects already reaching at pre-covid levels. On the back of extension of concession period by NHAI and RBI's relief of loan moratorium, management expects NPV of cash flow from its BOT portfolio to remain largely unaffected because of Covid-19 pandemic. IRB Infrastructure is one of the largest BOT toll operators in the country having market share of ~22% in the total Golden Quadrilateral projects with...

primarily on BOT route (due to cash crunch at NHAI) with 15 BOT projects to bid in pipeline, already. The company expects to add few more projects to its portfolio. Recently IRB emerged as a preferred bidder in ~Rs26bn (18% higher than NHAI costs) BOT project- Palsit to Dankuni on NH-19; however, the bid just got terminated (our understanding is due to pricing) from NHAI. The balance sheet has strengthened with a) retention of Mumbai-Pune expressway on TOT mode (IRB tied up Rs66bn debt and completed equity infusion of Rs14.3bn equity in June'20) and b) conclusion of stake sale in a...

19 June 2020 On account of the IRB-GIC InvIT deal, the reported financials of IRB have undergone a change. This results in reported gross debt and leverage declining sharply and provides IRB with room to bid for new projects. The Mumbai-Pune Phase II contract has achieved financial closure and the company has also paid the upfront equity of INR14.4b to MSRDC. We expect the projects IRR at 18%+ a major booster for IRBs fortunes. EPC business growth looks challenging and is totally dependent on new ordering. EPC order book (OB) stands at just INR47.3b with OB/rev ratio of 0.9x, the lowest since IRBs listing. Till the time, the company refills its order book (through BOT model as per company strategy), the low EPC revenue visibility is likely to remain an overhang on the stock performance. We broadly maintain our earnings estimate (<5% cut), but have incorporated new reporting structure into our model.

IRB Infrastructure (IRB) has bagged Mumbai-Pune expressway project on Change in Estimates | Target | Reco Toll-Operate-Transfer (ToT) basis for an aggregate value of Rs82.6bn from...